from what I read in that letter from Kyosho, this decision is based on sales numbers.
I think this whole die-cast thing has been getting nuts during the last two decades. Remember; Burago started with the 1:18 scale around 1984 with the 250 GTO and 250 Testarossa. You could get these models for around EUR 10,-- ( $ 15,--). Back then the models were produced in masses, bought occasionally as a toy for children with the purpose of play and scrap. And sales numbers were fairly healthy.
In my opinion, modelcars are way too expensive nowadays for reaching profitable sales.
Especially because earnings in China, where most companies produce, are rising.